Decline in home sales no cause for alarm
New home sales have fallen for the second month in a row, but the home building industry says the result is nothing to be worried about.
The Housing Industry Association (HIA) New Home Sales report has shown a seasonally adjusted 4.4% decline for new home sakes in May. The drop follows a 4.7% fall in April.
The fall was driven by a decline in detached house sales, down 6.7% for the month. Multi-unit sales, meanwhile, saw a rise of 4.9%. The HIA said multi-unit sales were trending higher, though to a smaller extent compared to building approvals.
HIA chief economist Harley Dale said the fall in new home sales was largely expected.
“There is nothing alarming to a reversal in the trend for new home sales. There is a cyclical downturn ahead for new residential construction activity, as new home sales signal, but the early pull-back will be mild by historical standards,” Dale said.
Dale said the HIA remained of the view that a decline in new dwelling commencements will gather pace throughout 2016/17 and 2017/18. The decline follows four years of growth that Dale argued “delivered enormous benefits to the broader Australian economy”.
“This economic benefit delivered by new home construction in recent years is unprecedented,” Dale said.